State hikes VAT, petrol price as it prepares for GST rollout
From electronic goods and four-wheelers to petrol and spices, a number of consumer durables and food products are set to get costlier with the Bharatiya Janata Party (BJP)led government approving a hike to value-added tax (VAT) for the second time this fiscal, citing rising expenses on the state’s various infrastructure development schemes.
The state cabinet on Friday decided to increase the price of petrol by Rs1.50 a litre and hiked VAT for two tax brackets by 0.5% and 1%, respectively. The price of diesel will, however, remain unchanged. The changes will be effective from Friday midnight.
With this hike, goods that were earlier charged a VAT of 12.5%, will now be taxed at 13.5%. Similarly, goods that were taxed 5.5% will now be evaluated at 6%. Earlier this year, the state government, as part of its annual budget, had decided to up the tax rate for these goods to 5.5% from 5%.